• 16 Nov
    USA – Fruit Juice Imports

    USA – Fruit Juice Imports

    In spite of continued reports of slow retail consumption for 100% juices in the USA, particularly for orange juice, research by Fruit Juice Focus has shown that total juice imports have grown over the past year. While this could be due in part to lower domestic production, it is promising nonetheless and could herald the end to the long-standing decline in uptake.

    Fruit juice concentrate

    Table 1. US imports of orange juice concentrate (FCOJ) (tonnes)
    Exporters Oct 15 to Sept 16 Oct 16 to Sept 17 % variance
    World 939961 974027 4%
    Leading exporters to US
    Mexico 451225 522712 16%
    Brazil 324121 312104 -4%
    Costa Rica 109710 87755 -20%
    Belize 35248 18293 -48%
    Canada 12908 10536 -18%
    Spain 22 5883
    Total US imports from the above countries 933235 957284 3%
    % of world total 99% 98%

    Table 1 – US imports of orange juice concentrate (FCOJ). The US imports the vast majority of its orange juice concentrate from just three countries, Mexico, Brazil and Costa Rica. Mexico has made significant advances in export volumes year on year with a 16% increase from 451225 tonnes during the period October 2015 to September 2016 up to 522712 tonnes for the corresponding period ending October 2016 to September 2017.

    Conversely Costa Rica has seen a 20% downturn in trade with the US during the same period from 109710 tonnes to 87755 tonnes. Brazil’s market share remains fairly stable at just 4% down.

    Smaller exporters to the US have also shown a reduction in their exports to the US with Belize down 48% for the period and Canada down 18%. Spain has entered the market but the volume of 5883 tonnes is too insignificant to allow any meaningful projections as to whether they will increase volumes in the future.

    As a group the countries shown in this table, which account for almost all exports to the US, have increased their export volumes of FCOJ by 3% which is in line with global exports as a whole which have increased by 4%.

    Table 2 – US imports of Apple juice concentrate (AJC). This data has been retracted (The Editor)

    Table 3. US imports of pineapple juice concentrate (tonnes)
    Exporters Oct 15 to Sept 16 Oct 16 to Sept 17 % variance
         
    World 173796 155188 -11%
    Leading exporters to US
    Thailand 67863 54847 -19%
    Philippines 42649 47054 10%
    Costa Rica 31442 26010 -17%
    Indonesia 20569 18085 -12%
    Total US imports from the above countries 162523 145997 -10%
    % of world total 94% 94%

    Table 3 – US imports of pineapple juice concentrate.  Global exports of pineapple juice concentrate have been falling and are down 11% year on year for the period analysed. This downturn is reflected in all the countries in the table bar one – the Philippines which bucked the trend with an increase of 10% up to 47054 tonnes. Of the remaining countries Thailand and Costa Rica suffered 19% and 17% falls respectively and Indonesia a 12% drop.

    Fruit juice not-from-concentrate

    Table 4. US imports of orange juice not-from-concentrate (NFC OJ) (tonnes)
    Exporters Oct 15 to Sept 16 Oct 16 to Sept 17 % variance
    World 301881 415644 38%
    Brazil 225271 294927 31%
    Mexico 74810 114208 53%
    Canada 264 3499 1226%
    Spain 743 1657 123%
    Total US imports from the above countries 301087 414291 38%
    % of world total 100% 100%

    Table 4 – US imports of orange juice not-from-concentrate (NFC OJ). Brazil, as would be expected is responsible for the majority of fresh orange juice imported into the US and continues to grow with an increase of 31% year on year from 225271 to 294927 tonnes. Mexico, with less than half Brazil’s volumes remains the only other significant player in this market having increased theirs by 53% year on year. Globally, exports of fresh orange juice to the US have shown a significant increase during the period – up by 38%.

    Table 5. US imports of apple juice not-from-concentrate (NFC) (tonnes)
    Exporters Oct 15 to Sept 16 Oct 16 to Sept 17 % variance
    World 12354 13064 6%
    Canada 7888 8143 3%
    China 719 1068 49%
    Germany 686 872 27%
    Mexico 1057 815 -23%
    Total US imports from the above countries 10349 10898 5%
    % of world total 84% 83%

    Table 5 – US imports of apple juice not-from-concentrate (NFC).  The US imports most of its supplies of apple juice NFC from Canada, receiving 13064 tonnes for the period October 2016 to September 2017. This is nearly eight times the amount shipped into the US from its nearest competitor China. The other two exporting countries in the table, Germany and Mexico have been included to demonstrate the market dominance of Canada and as can be seen constitute a very small amount of the volumes traded.

    Table 6. US imports of pineapple juice not-from-concentrate (NFC) tonnes
    Exporters Oct 15 to Sept 16 Oct 16 to Sept 17 % variance
    World 71190 95617 34%
    Leading exporters to US
    Costa Rica 40180 41147 2%
    Philippines 15367 29941 95%
    Guatemala 1088 8470 679%
    Indonesia 5409 6210 15%
    Honduras 1764 4148 135%
    Thailand 4486 2764 -38%
    Mexico 1222 2189 79%
    Total US imports from the above countries 69517 94869 36%
    % of world total 98% 99%

    Table 6 – US imports of pineapple juice not-from-concentrate (NFC).  Global exports to the US have risen threefold from 71190 to 95617 tonnes for the period October 2016 to September 2017 compared to the same period in the previous twelve months. With the exception of Thailand – who dropped by 38% – all the countries listed in the table have shown an increase in exports to the US for the period. In volume terms the Philippines made the most significant jump, up 95% year on year from 15637 tonnes to 29941 tonnes, closing the gap on Costa Rica who is the major player in fresh pineapple juice (NFC) exports.

    Table 7. US various juice imports (tonnes)
    Oct-Sept 2016 Oct-Sept 2017
    FCOJ 939961 974027
    AJC 1897843 1931254
    PINEAPPLE CONC. 173796 155188
    NFC OJ 301881 415644
    APPLE NFC 12354 13064
    PINEAPPLE NFC 71190 95617
    TOTAL ALL JUICES 3397025 3584794

    Source: Customs trade data.

    By Caroline Whibley Trade Data
  • 16 Nov
    The Australian Fruit Juice Market

    The Australian Fruit Juice Market

    It is evident that there have been some problems over the past couple of years due to a lack of Valencia fruits, the shortages have been attributed to a combination of short crops and higher than usual demand from the Asian fresh market and this has resulted in higher prices of fruit and left insufficient supplies for the processors.

    Fruit Juice Australia comments that production has been in steady decline for the past two years and forecasts for the 2017-18 crop indicate a further 5% reduction in the Valencia supply, with the total crop predicted to fall from 262 000 tonnes last season to 250 000 tonnes this season. They expect this supply shortfall combined with industry growth will mean demand will increase significantly into the future.

    Recent conversations with Australian processors agreed that there is still an acute shortage of Valencia fruit for the processing sector and that this will continue for many years into the future while the industry responds by planting more trees. Producers add that rising material cost prices for juice processors over the past twelve months is not a short-term problem resulting in them having to pass these costs in part on to consumers.

    Historically Australia has not experienced the need to import not from concentrate (NFC) juice due to plentiful supplies at home. But the poor fruit supply recently has created the need for much higher imports in 2017 (refer to graph 1)  with imports of nearly 2 million litres in May 2017 versus almost zero at the same point in the previous year. Australian imports of FCOJ amount to around 30 000 tonnes per year.

    Orange juice consumption

    Data on Australian orange juice consumption is notoriously difficult to obtain but figures received indicate that sales of juice from concentrate far outstrip sales of NFC (refer to graph 2) but reconstituted juice sales have declined by 27% over the past decade while NFC uptake has declined by 8% over the same period. NFC uptake is expected to remain strong for the rest of 2017. (see graph 3)

    The fresh chilled market within Australian grocery has returned to growth, performing strongly with a compounded annual growth rate of 10.9% in value and 5.4% in volume in the first half of the year. Looking at chilled versus ambient the figures for moving annual domestic sales show chilled AUD551m ahead of ambient AUD447m. Research shows that Supermarkets are the most common place to buy packaged fruit juice in an average four-week period (5.1 million Australians purchase fruit juice at Supermarkets). Between June 2016 and August 2017, 6.6 million Australians reported drinking packaged fruit juice in any given seven days – up 25% from the year before which compared to other regions globally is a huge proportion of the population.  Golden Circle tops the table of the most widely consumed juices in any given week with supermarket own brands in second place and Berri and Daily Juice third and fourth respectively.

    Taking an overview of the market the supply of FCOJ is not going to be a problem next season and pricing out of Brazil is predicted to remain stable in the medium term. The problems in Florida could mean higher volumes in fruit crush to NFC this season to meet the demands of the US market which is not necessarily good news for the Australian market – given the stable demand for NFC juice, another lacklustre Valencia crop and continued strong fresh fruit exports to Asia. Nevertheless, Australian consumers seem to be willing to pay for fresh premium juice so the answer could lay in increasing imports and raising prices at the retail level.

    Sources: Global Data, Fruit Juice Australia, Roy Morgan Research

    By Caroline Whibley Trade Data
  • 16 Nov
    From Sol to Soul

    From Sol to Soul

    One man’s vision to connect smallholder fruit farmers in Nicaragua with conscientious consumers in export markets worldwide, through organic and sustainably produced dried fruits, puree’s and fruit juices.

    Mango Farmer

    With virtually no job prospects and limited educational opportunities in rural areas and with almost half the population living on less than USD1.00 per day, Nicaragua is the second poorest country in the western hemisphere. Breaking the cycle of poverty is almost impossible for small farmers trying to simply exist let alone compete in the global market place.

    Will Burke, founder and CEO of Sol Organica, the parent company of Sol Simple and Burke Agro, had other ideas. There must be a way to bring economic and educational opportunities to marginalized communities while simultaneously protecting and utilizing the country’s natural resources?

    “I envisioned starting a fruit company, but not just any fruit company. I wanted to provide education and training to farmers, operate the plant using renewable energy, and support communities by employing single mothers.” Says Will.

    In 2007 Sol Simple was founded to provide the commercial face of Burke Agro’s dried and pureed tropical fruit products and juices business and to form the important bridge between global export markets and the Nicaraguan farmers.

    Here Will Burke talks to Fruit Juice Focus about how it all started and how his unique social enterprise model has helped provide market based solutions for poverty alleviation.

    Fruit Juice Focus (FJF): Can you tell us a bit about your personal background in the fruit industry and how you came to set up Sol Organica?

    Will Burke, Sol Organica (WB): I started out in education as a teacher and my first experience of Nicaragua was when I took up a teaching post here and it was here that I met my wife, also a teacher. After a couple of years working in Nicaragua and then back to the US for a spell at graduate school in Boulder, Colorado we ended up in Venezuela, teaching at the American embassy school. After six years experiencing what we felt was the deterioration of the country under Chavez we decided it was time to move on.

    We asked ourselves, do we want to continue in education? Or do we want to move back to Nicaragua where my in-laws were living and start up a social enterprise, giving back something to the country through education or a business?

    We brainstormed ideas and my wife reminded me of a moment when walking on the beach in Nicaragua a few years prior we saw thousands of mangos just rotting on the ground. We thought back to our days in Boulder, which is really the capital of natural organic food products in the US, where people were regularly paying USD15.00 per pound for organic dried mangos. And we thought how sad it was that these growers with all this product didn’t have a connection to that market and what a missed opportunity it was.

    We started researching organic dried mangos as an idea and reaching out to Non-Government Organisations (NGO’s) and development agencies in Nicaragua, getting the lay of the land. I met a couple of growers, looked at my savings, drafted up a business plan and spoke to a couple of people in the market and thought ‘this idea might have some legs’. Long story short I invested, and we set up the company.

    We moved back to Nicaragua and started up a fruit drying plant to dry organic fruits. I identified and organised small growers, transitioning them from conventional farming to organic farming using my educational skills. I chose to work with single mothers which, as well as furthering gender equality, also worked from an educational viewpoint.  One of the best ways to give children the opportunity to go to school in third world countries is to ensure that their mothers are employed and that they have control of their income so that they would make sure that their children were educated.

    We introduced renewable energy into the process by importing solar collectors that can heat air through solar power which is part of the environmental impact we were looking to achieve. An additional impact was the transitioning of the small growers from conventional to organic farming. The idea was to educate them, improve their yield, give them a niche market where one didn’t exist for them before and improve their livelihoods as a result.

    So that was the DNA of the company and it started with dried fruit.

    Within two years we realised that there is more to the tropical fruit world than dried fruit, so I started investing a little bit in pulping equipment to get into the juice business. In our dried fruit operation, we were experiencing bottlenecks depending on how many dryers we could fit in the limited space we had. I realised we could process a lot more volume in this space by expanding into the juice business and simultaneously improve our social impact. And that’s how the business evolved into juice.

    FJF: What difficulties did you face in the early years of the business and how did you deal with them?

    WB: I didn’t meet with any real opposition, but we were certainly going against the grain in terms of working with organic production. When we started the plan was that the NGO’s, government institutions and development agencies would support me by helping to identify growers and work with us to provide training for them in the transition from conventional to organic farming. And initially they were committed to it. But at that time Nicaragua was going through a political upheaval with the arrival of the newly elected Sandinista government six months after we started the business. The result was that very quickly the development agencies were subject to a freeze on spending and the funding dried up. Any funding that remained was either focused on certain regions in the country or were not focused on organic agriculture and couldn’t help us out.

    So, we had to do it on our own, and I was out there in my truck identifying more and more growers and integrating them into our system and then working to transition them from conventional to organic farming. In time we were able to hire our first agronomist to take this on as his own project which was a big step forward.

    Another hurdle was the dried fruit market. The real issue was that we were selling dried fruit in bulk and with us being a small operation, the costs were too high, and we couldn’t compete on price

    To combat this, I decided to develop a brand, Sol Simple, that would become the face of our company positioning us a brand that whilst more expensive than other products, reflected our commitment to organic principles and our social and environmental impact. This brand was born from need but has worked incredibly well for us and today we remain the only company processing fruit and certainly the only company in organic fruit production in the country.

    Pitahaya Farmer_2

    FJF: Can you tell us more about your move into the fruit juice and puree market and the products you produce.

    WB: Our main focus is pitahaya puree or red dragon fruit puree – which is pitahaya with the ‘h’. Whereas pitaya without the ‘h’ is white pitaya. Pitahaya is indigenous to Nicaragua and Central America with Nicaragua being the largest pitahaya producer in the region and the largest organic producer in the world.  This is primarily due to the market that we have been able to develop with our partners, having planted and harvested more and more pitahaya over the years as a direct result of having been able to transition more and more growers into organic farming from conventional farming. So that is our number one product and we have been able to make a name for ourselves through that.

    Meanwhile we have been really focused on passion fruit juice and developing the value chain and finding key customers that want to partner with us and who are willing to stick to a fixed price for the long term in order to create market stability. This allows us to plan ahead on the production side and look to increase our customers’ use of passion fruit as they then have the ability to project years in advance what the ingredient cost will be. That means we will be able to grow organically with them and provide a sustainable market for our small growers. Everybody wins.

    And I think that needs to be the case for most fruits and in agriculture in general – especially when you are talking about small growers because if they don’t win nobody wins in the end. Small growers deserve a dignified livelihood and raw material prices need to provide that for them. And once they have that it provides for a stable market.

    FJF: How do you manage your collective of 700 or more small growers? How do you ensure they maintain the standards that you require and deliver the products on time?

    WB: We dedicate a good proportion of our budget to our field programme. We have nine agronomists out in the field on their motorcycles everyday giving workshops, doing farm visits and working on financial literacy. We go through everything from planting to pest and disease control, to how do you manage your farm as a business and we have developed a curriculum that underpins this.

    We have also designed systems for our 700 or so small growers organising them by collection centres within their communities. These collection centres create a central dry place where the grower can come when we schedule pick up to collect their harvest and provides the food safety and hygiene that we need.

    At each collection point there is a committee that is part of the internal control system. This committee will also act as the auditors for other collection points meaning that they will visit another community, going from farmer to farmer reviewing and auditing their paperwork. The committee for the collection point being audited will in turn audit another collection point in the same way and so it goes on. This means committees are not self-auditing but auditing other communities they don’t know which promotes integrity.

    The system works, and they respect it that way. With organic agriculture you need to ensure that no one is trying to pull the wool over your eyes. If one grower cheats, then everyone loses. They take it very seriously and we take it seriously. In addition, we are audited. it’s a ‘ride along audit’ from the local agricultural department. Every Monday a representative from the ministry of agriculture rides along with us visiting the farmers and checking their production registries.

    Pitahaya Farmer_3

    FJF: Do you still get involved on the ground with the social and environmental issues of the business and how is the company structured?

    WB: Culturally the Nicaraguans aren’t really used to a non-hierarchical system especially when they need to think on their feet. They prefer to talk to their supervisor and then that supervisor comes to talk with me so there is still an element of the hierarchy system even though we have been trying to get away from it.

    We are a company of 250 employees and we have had a board of directors since the onset of the company – it’s a three-member board and I am the president of the board and I am also CEO of the corporation.

    I am certainly still in weekly meetings and making decisions as needed but as we’ve grown I have been able to delegate quite a bit. It’s always important to hire people that are smarter and more agile than one’s self and I think we have done a good job in identifying people who want to be part of the mission and want to get out there and make a positive impact and be more comfortable with the responsibility they carry.

    FJF: How does your production and distribution work? What sort of infrastructure do you have in place?

    WB: We own all the infrastructure, all the packing materials – although sometimes we co pack for food service, retail packs, and for frozen products where typically our customers own the packing material and we warehouse it for them.

    But we own all the equipment and most of the packing material like drums along with the land, the offices, warehouses and the trucks. Sometimes we outsource refrigerated containers when we need more frozen storage. The plant has two lines. A juicing line and a puree line, with each of those lines having a capacity to produce a container every day and a half whether it’s mango puree, pitahaya puree, pineapple juice or passion fruit juice.

    FJF: How have your destination markets evolved over the years with regards sustainability and social impact issues?

    WB: Our main market is North America, but we have a deep connection with Europe.

    In the early days I wasn’t able to get much support from NGOs but the Dutch have a really good training programme through their agency CBI, which is a European export coaching programme. I enrolled in the three-year course and it proved to be a great success helping us form good contacts in the business. It has allowed me to look at Europe not only as a real sustainable market but also as an opportunity for us to diversify into and adapt to the different tastes and different requirements.

    Europe is more up to date when it comes to fair trade and that’s an opportunity for us. Americans are a lot less knowledgeable about what fair trade is and what it means and why it should be supported whereas Europeans are much more savvy.

    So that’s an opportunity in terms of niche markets for us because frankly we are more expensive than most of our competitors as we don’t necessarily deal in commodities. We offer a lot more added value. What we see in the US and in Europe especially, is that more and more buyers and the brands themselves and the bottlers, want to get closer to the source of supply for a lot of reasons. One is for food safety and transparency and traceability. The other is that more and more consumers want to know where their products are coming from. They want to know the source country, what kind of farmers are growing the fruit and what they are buying. And the brands are having to respond to that.

    There are many more brands now that have started out with a social mission and are growing incredibly fast but are finding that there is a lack of companies like Sol Simple that provide the authentic connection to a grower. We now have people seeking us out who are elated when they see that we provide sustainability reports and that we partner with local government institutions and NGO’s and can demonstrate that we are actively improving livelihoods. These brands need a sustainable source and to be able to report to their shareholders who want to see a positive social impact and a positive financial return on their investment.

    FJF: What do you see as the next phase in the Sol Organica story, and how do you see the future of the Nicaraguan fruit industry?

    WB: That’s the sixty-four-thousand-dollar question!  It’s a mixture of many things. On the one hand it’s more of the same as we have an excellent model. We do want to diversify into other fruits and their respective purees and juices. Pitahaya is number one, and we believe passion fruit will be number two and we are heavy in mango – especially dried mango and primarily we’d like to develop those markets even more because there is still idle time on our equipment.

    As we grow we do see opportunities in Central America in natural beverages and we see opportunities in maybe providing add-on services like pre-blended products. We are already packing for food service and retail and are very good at that. We are also looking at Individually Quick Frozen (IQF). We’ve run trials on IQF and had positive responses but don’t own IQF equipment and would have to look at the investment costs for this. IQF is when you buy a bag of frozen blueberries in the supermarket they are IQF frozen blueberries. They are not frozen together in a big block whereas 20 years ago they were – nowadays they are individually frozen which improves the quality.

    Most importantly, we are actively working in regenerative agriculture, which focuses on soil health and carbon drawdown from the atmosphere.  It’s a non-politicized movement that everyone should get behind because it can be simply framed around improving water shed and soil management by planting more cover crops to increase top soil depths, rain water peculation, preserve fungi communities, and minimize soil runoff that we witness in the increasingly common heavy rains.  Whether organic or conventional, it improves yields and livelihoods as a result.

    Also, we would like to see more of a formal market for fruit in Nicaragua. One of the reasons that fruit in Nicaragua can be a little more expensive than fruit in neighbouring countries is because it is not industrialised yet. There is not enough consumption locally to create that formal market so what happens is we buy everything from our growers – grade A, B and C as there is not enough fruit planted. We are looking to get into organic fresh fruit exports because that way we can add more value for the grower by paying them more for the fresh quality fruit and paying them less than we currently pay for the second and thirds. It will help create the environment where our fruit juice processing company and our fruit juice is more competitive because the raw material is less expensive.

    FJF: How is the company performing financially?

    WB: This year we are projecting USD5million in revenue. We had some heavy rains which have affected some of the harvest which may result in us coming under that. We have a growth plan to hit USD20million in sales by the year 2020. And that’s not that far away!

    FJF: How do you see the future of the fruit juice industry?

    WB: It’s all about the Millennials! Those born between 1981 and the early 2000’s. People’s pallets are evolving. And through globalisation more and more products, especially exotics, are being made available. Social media is helping to spread the word about these different and interesting fruits and juice products like pitahaya, lychee, or soursop/graviola. More exotic unknown fruits have more opportunity today than they did five, ten years ago, because of those conditions and I think that the millennials play a good part in that they are always curious. They have sophisticated pallets they like to spend their money on food and on the experience. They have the social mindset so it is a really good opportunity for a company like ours and we are still trying to figure out how to engage more closely with that demographic because we think that they can really contribute to the social environmental and impact and help us grow our mission.

     

    By Caroline Whibley Features
  • 16 Nov
    Florida citrus forecast latest

    Florida citrus forecast latest

    In the aftermath of the severe damage caused by hurricane Irma and the ongoing problems for growers caused by citrus greening, the outlook for the Florida citrus industry is difficult to say the least and this is backed up below by the USDA November forecast for the 2017-18 season .

    All oranges: The USDA Florida all orange forecast released on 9th November for the 2017-18 season puts the figure at 50.0 million boxes, down 4.00 million boxes from the October forecast.  This will be the lowest ever output since the 49.0 million boxes produced in the 1945-46 season if the predictions are realised. And will reflect a 27% drop against last season’s production. The forecast consists of 21.0 million boxes of the non-Valencia oranges (early, midseason, and Navel varieties) and 29.0 million boxes of the Valencia oranges. The USDA Agricultural Statistics Board has applied regression data from the 2007-08 through to 2016-17 seasons and  all references below to average, minimum, and maximum refer to the previous 10 seasons unless stated.

    Non-Valencia oranges: The production forecast is now 21.0 million boxes, reduced by 2.00 million boxes. Current fruit size is below average and projected to be below average at harvest. Current droppage is above the maximum and is projected to be above the maximum until harvest. The Navel forecast, included in the non-Valencia forecast, is unchanged at 600 thousand boxes, and is 3 percent of the non-Valencia total. Current Navel size is above the maximum, and droppage is above the maximum.

    Valencia oranges: The production forecast is reduced by 2.00 million boxes to 29.0 million boxes. Current fruit size is below average and is projected to be below average at harvest. Current droppage is above the maximum and projected to be above the maximum at harvest.

    Grapefruit: The forecast of all grapefruit production is lowered 250 thousand boxes to 4.65 million boxes. This forecast, if correct, represents a 40% drop against last season’s production and the least since the 1918-1919 season of 3.50 million boxes. The white grapefruit forecast is reduced by 50 thousand boxes to 850 thousand. The red grapefruit forecast is reduced 200 thousand boxes and is now at 3.80 million boxes. Projected fruit size of white grapefruit at harvest is below average while projected droppage is above the maximum. Projected fruit size of red grapefruit at harvest is projected to be above average and projected droppage is projected to be above the maximum.

    Source: USDA

    By Caroline Whibley News
  • 16 Nov
    Help for generation stress. The beverage start-up with a global footprint set to relax and de-stress UK consumers

    Help for generation stress. The beverage start-up with a global footprint set to relax and de-stress UK consumers

    Tranquini, the premium natural relaxation drinks brand, is shaking up the UK beverage sector following its recent launch into the marketplace with its product range of global de-stress and active relaxation drinks. Entering the UK market at a time when its healthcare and wellbeing sector is currently valued at GBP180bn and forecasted to rapidly grow to GBP209bn in 2020, according to a recent report by Price Waterhouse Coopers, Tranquini is following the consumer trend which is leaning towards de-stress and relaxation beverages.

    With its select blend of extracts Tranquini’s non-drowsy relaxation beverages are claimed to be particularly effective when there is a need to de-stress and focus.

    The company believes that the products will resonate with the ‘millennial’ marketplace where Tranquini’s health-focused product development has really struck a chord with ‘the stressed generation’ driving the vast fortunes of the UK health and wellbeing sector.

    The products and brand have been developed by a team with over 200 years’ experience at well-known global soft-drinks organisations, including Ahmed Elafifi, the company’s FounderBefore launching Tranquini, Austrian-Egyptian Elafifi spent more than a decade at Red Bull, driving the company’s growth, managing multi-national campaigns and serving as a key member of its Executive Board. Elafifi completed the global roll out of the Red Bull business and brand in 58 countries, growing its turnover from Euro40m to Euro800m. Billed as Tranquini’s Chief Relaxation Officer Elafifi was inspired to create Tranquini by perceiving a change in the beverages industry and a movement away from regular sugary soft drinks.

    Here Ahmed Elafifi talks to Fruit Juice Focus about the development of the Tranquini brand and how he and his team believe that this new range of innovative drinks products will help with modern life stresses in a range of scenarios that require focus and a positive mindset.

    Fruit Juice Focus (FJF): Can you tell us a about your background in the drinks industry and how did the idea for the Tranquini brand and the relaxation drinks products come about?

     Ahmed profileAhmed Elafifi, Tranquini (AE): I started my career at Proctor & Gamble in Cairo 1991 followed by the Henkel group in 1992, responsible for brand management and sales. In the mid-nineties I moved to the beverages sector and to the Coca Cola company. In total I worked for more than eleven years in the Coke organisation. For the first part I was in central marketing, returning several years later to manage the very big and vibrant Coca Cola business in Poland where I was Chairman and Managing Director of the bottling plant managing over 3000 staff and revenues of Euro1bn. This was my last job before I founded Tranquini.

    In-between my time with Coca Cola I spent seven years as the board member of Red Bull, I was tasked with managing very big promotional campaigns in the fastest growing markets for Red Bull like Japan, Russia and India. It was a really great and inspiring seven years. During this time my obsession of setting up my own private venture started.

    For personal reasons I needed to stop the global travelling which was all part of the job with Red Bull at that time and settle down in one place for a while and gather my thoughts which is why I came back to Coca Cola Poland to manage the business there.

    During this second spell at Coke I was involved in a major restructuring project and at that time I thought that I am not at all convinced that this is what I want to be doing working on such a difficult project as the restructuring program that involved making people redundant. I was not alone in this and I discovered that there were many colleagues and friends who were feeling the same.  Then this whole notion of relax, and be positive started to take hold because we knew that relaxed people have the capacity to be positive and this results in good things happening to all of us. This led to the whole proposition of Tranquini and eventually I took the decision to quit after more than 25 years in a corporate career to start this venture and pursue this journey.

    This was four and a half years ago. The first two years were all about set up – the creation of the proposition. What took the longest time was the creation of the formula for the drinks. We needed to create a formula which was all about the natural ingredients which had the efficacy and the functionality to deliver what we were after and at the same time can meet regulatory approval globally. This took us around two years to create the right ingredients for the drink itself and then two and a half years ago – specifically May 2015 – we started selling. And today we have Tranquini on the shelf in 39 countries around the world including Great Britain, Ireland, Austria, Germany, the Netherlands, Belgium, Monaco, Italy, Spain, Greece, South Africa, India, Egypt, UAE, Saudi Arabia, Hong Kong, Singapore and Canada.

    Nothing happens on its own. It is people that make things happen and I was very fortunate to be able to attract a team of very high-profile beverage professionals. When I started out in the beginning I always thought ‘who in their right mind would leave such a senior well paid job within the security of a major company and join such a venture as Tranquini?’ But what happened was I found a lot of people who were ready to do the jump, to create something new, and today we have a team of 13 individuals, including myself, who have 200 years of premium beverage lifestyle brand experience. Colleagues who are very much there with me on our journey to create this new category of relaxation drink and to create this new global brand with Tranquini.

    FJF: As the Founder of the company what different challenges have you faced as an entrepreneur working to establish a company and brand as opposed to those you encountered when working for the major drinks companies?

    AE: These big corporations have unbelievable resources, tools and systems. You have access to masses of consumer and market data at your fingertips, and the whole company knows how to use this data and get the maximum intelligence out of it. And then suddenly you find yourself rewinding back to a place where everything is a completely blank sheet of paper and that’s it.

    We were experiencing situations where someone would call me with an idea and the need to get some market analysis and I would say that’s great, but we don’t have any data, let’s create a report and start collecting this data now from scratch.

    One of the biggest and most important changes is that I am now having to think of the company in terms of cash flow  – it’s a completely different mind-set. I am always saying that we need lots of people from big corporations to join the company, but we have to educate them to think differently about the challenges we face in this start-up environment. It is almost like bringing in people who are football players and asking them to start playing tennis.

    FJF: You are obviously coping with the stress quite well – presumably in part thanks to drinking your own products to help maintain a relaxed environment! What is your view on stress in the world today and how are people coping?

    AE: Yes, exactly, but when you look at it the world today is so full of sources of stress. Stress on a macro level where you have the financial crisis and terrorism and there is also Trump. And on a micro level there is a lot of stress when it comes to family, work, relationships and money. Work is an unbelievable source of stress – tough negotiations, tough meetings and long hours. People when they want to make presentations or speeches they turn red, they start sweating and they get a knot in the stomach – these are symptoms of stress and anxiety attacks.

    People are trying to deal with or manage this stress by taking drugs, alcohol or comfort eating or extreme exercise and activities, but the fact is there is no convenient innocent alternative to these unhealthy remedies today. And this is exactly what we are trying to change with Tranquini . To create something which is made of tea and herbal extracts that are very well known to calm you and to help you deal with your own stress and help to affect positively your mood. This is something that is in a can or a bottle that you can pick up and drink just before a tough meeting or tough negotiation and you can get this very natural product help to deal with your anxiety and manage your stress and relaxation and positivity.

    FJF: You are positioning Tranquini in the growing healthcare and wellbeing sector. Do you see relaxation drinks as just another ‘fad’ amongst your target consumers or do you think it is here to stay?

    AE: This is a very important point. when you look at the type of stress that we are facing right now it is not something that is expected to go away. Not with the technology as it is today that is making everything even faster, and the need to be connected all the time.

    Even kids now –  the teenagers – they are posting that they are completely stressed about whether they are getting five ‘likes’ or 50 ‘likes’. They are stressed about their schooling. People at work are stressed. Driving too is very stressful where you need to relax otherwise it can lead to road rage. There are so many sources of stress around us and the need for relaxation is so big that I think that this is something that is not only here to stay but will increase over the coming years.

    When you look at other categories of beverages like energy drinks for example, they grew so fast at the end of the nineties/beginning of the two-thousands, engaging with the spirit of the times where people were saying ‘I want to work very hard, but I also want to play hard to compensate’. They were saying give me energy at any cost. The emergence of energy drinks was very much integral with that period and those drinks are still selling in large numbers today which is an indication of the potential growth for products like ours. Definitely not a ‘fad’.

    The new focus today for people around the world is the interest in managing stress and to have a more balanced life between work and play. it is a very important topic now. People are no longer motivated by the approach of ‘I have to work 50-80 hours per week and my whole life only revolves around this ‘, they also want to do their hobbies. They want to have their partners, they want to live their life outside of work.

    People are telling us now and telling the beverages sector overall that we need more natural, more healthy, less sugar based products and I think that by putting these two major insights together the need for relaxation and the need for natural and healthy drinks this is something that is here to stay. This is a trend that has attracted the consumer and the consumers are telling us they need this right now.

    FJF: Do you have any competitors in the market yet?  Companies looking to jump on the bandwagon having seen the success you are experiencing?

    AE: There are a couple of examples here and there, but they are very small instances and they are just in one or two spaces in a couple of countries around the world, and do not pose any major form of threat at present. Actually, competition is something that we are looking forward to. The more brands that launch in the relaxation drinks space the more we will get help to educate and grow the category, which will be good for everyone.

    FJF: Is the Tranquini brand making inroads into other countries and regions such as the US and continental Europe?

    AE: For North America we started in Canada and we are in final preparations for the launch in the US. In continental Europe we are already in many countries – in Germany we are now starting to gain traction, in the UK we are now spreading into Northern Ireland. We are in Spain and then also Poland and Greece, so we are more or less in 15 to 18 countries in Europe when you add in the current launches. We have a presence in the middle east in Egypt and Saudi, UAE Kuwait, Oman, South Africa and we are also in Asia in Hong Kong and Singapore and Indonesia. So, as you can see from the countries I have mentioned we are trying to increase our foothold in different geographies from where we will roll out the brand.

    FJF: Do you plan to launch more relaxation drinks products – particularly into the fruit juice sector?

    AE: At the moment the decision is to maximise the current products we have and to make sure that the consumers can reach out and find the best format and solution for their relaxation needs. We have the three offerings that fit well within the beverage sector today, namely the functional beverages in cans and the value added flavoured waters and still drinks in bottles. We will watch the space to see what the consumer trends are in the juice sector and how we might introduce new variations of our drinks to meet any developments.

    FJF: Can you tell us more about the ingredients used in the Tranquini drinks range?

    AE: The Tranquini drinks products are created in two parts. Firstly, there is the combination of the green tea extracts which contain Theanine which helps increase mental focus and concentration and this is blended with other natural products such as Chamomile, Lavender and Lemon Balm to create the base for the drink. Secondly, we add in the other elements that are made of natural fruit and vegetable juices to create the colours and flavours.

    We don’t need to use any preservatives as the cans are pasteurised and the bottles are asceptic. The sweeteners that we are using are sourced from natural fruit juice – in some cases they are made from fruit juice concentrate and in others it can be sourced from the sugar contained in the fruit. The level of sugar and sweeteners in these drinks compares well to other soft drinks which contain 14 grams per hundred millilitres whereas the Tranquini drinks have between two to five grams per hundred millilitres. A considerably lower level of calorie and sugar than other soft drinks.

    All the ranges we produce contain fruit juice elements in various guises such as mixed berries in both the Sparkling and Still drink varieties. The Water+Juice drink range includes Passion Fruit, Cherry and Apple Cherry.

    FJF: How is the company structured in terms of its management operation?  And how do your production and distribution arrangements work?

    AE: I have a management board made up of very high-level professionals all coming from the beverages industry from Coca Cola, Pepsi, Diageo, and other market leading companies and they are responsible for the marketing, sales and HR functions. The other partners are responsible for managing the business around the world.

    For Europe and for North America we use a canning operation based in Austria and a bottling plant in Italy. We are working with two exceptional partners here.  We also use production facilities based in India and Russia for distribution in their respective countries and a base in Singapore to supply the Asian region.

    FJF: Are you able to divulge any details on volumes sold, turnover?

    AE: Regretfully we cannot share this information with you, but we are off to a very good start in our first two and a half years, comparing well with other start-ups in beverages and we believe that we would be in the top range in terms of delivering good revenue numbers. Obviously, we are still a small venture and it is still early days but we are confident that we are on track both financially and organisationally.

    FJF: What is the next phase of development in the Tranquini story?

    AE: We have three very important directions we are spending the next three years working on. One is to oversee and complete the launch into almost forty countries, to expand into new countries and to consolidate our current position as the first global relaxation drink. The second part is to build an ‘innovation pipeline’ to help create this global brand we are aiming for. By this I mean we need to analyse in depth and work on products that will satisfy the very different geographic preferences, different tastes and different values across the global markets to get some really interesting ideas for new products. The third part is how to manage consumers’ perceptions of the relaxation lifestyle because when you see me drinking Tranquini, I want you to think that here is some guy who is living an active, positive and relaxed life style that you would like to join. For us this is an area where we are doing a lot of work to build the brand and the Tranquini lifestyle image.

    FJF: What future trends do predict for the fruit juice industry?

    AE: I am a very big believer in the fruit juice category. I have worked a great deal in this side of the business in my time especially with Coca Cola on fruit juices and a lot of big fruit juice brands. Consumers are telling us more and more now that they want to go into this ‘natural’ direction and I think there is nothing better than for the juice industry to address this need through their fruit juice products.

    The issue I think is that the fruit juice industry really needs to listen more to consumers. To listen to their concerns about healthy, less sugary drinks and to react to that with new and more health based products. Of course, there is the orange juice commodity and the apple juice commodity which will always continue to be very big, but I think that the fruit juices are in my view missing out on the potential when it comes to innovation and to add value. I believe that for the more modern and more consumer connecting brands there is a huge opportunity and in a couple of years this will be the way to bring real growth into the fruit juice market

     

    By Caroline Whibley Features
  • 16 Nov
    Argentina is one of the world’s main exporters of concentrated juices

    Argentina is one of the world’s main exporters of concentrated juices

    ARGENTINA.  Dino Troni, Coca Cola’s general manager for Latin America has been quoted as saying that Argentina’s citrus industry is one of the most competitive worldwide and is the main exporter of concentrated juices in the world. Mr Troni says that because concentrated juice is an important element in the Coca cola beverage industry a key aspect for them is the question of seasonality, which plays an increasing factor in national production both in lemons and sweet citrus fruits (oranges, grapefruit, tangerines). When there is no production in the northern hemisphere. “Argentina has the capacity to deliver juices and concentrates that are enjoyed all over the world. The country has a natural capacity to develop these markets because of its climate and because it’s production takes place in the counter season of the northern hemisphere,” he added.

    Source: Fresh Plaza and eleconomista.com.ar

    By Caroline Whibley News
  • 16 Nov
    America’s top fruit juice choices are oranges and apples

    America’s top fruit juice choices are oranges and apples

    US. A recent study released by the United States Department of Agriculture’s Economic Research Service (USDA ERS) loss-adjusted food availability data reported that on average Americans consumed an average of 115.4 pounds of fresh and processed fruit per person in 2015.

    Orange juice consumption was the nation’s favourite, unsurprisingly, at 2.7 gallons per person in 2015. Apple juice came second at 1.6 gallons per person with grape juice and pineapple juice third and fourth respectively.

    The report which has been updated for 2017 appears in ERS’s Ag and Food Statistics: Charting the Essentials data product.

    Source: ers.usda.gov

    By Caroline Whibley News
  • 16 Nov
    Juice Covenant signs up two new members

    Juice Covenant signs up two new members

    SUSTAINABLE JUICE. At the 2017 AIJN Juice Summit in Antwerp in October, the latest two members, SVZ and Firmenich, committed themselves to the goal of 100% sustainable juice and puree by 2030. SVZ is a producer and supplier for fruit and vegetable ingredients for leading food companies, and Firmenich is the world’s largest flavor company.

    “Firmenich has a 122-year heritage of leading its business responsibly. That’s why we are committed to running the most ethical, traceable and sustainable value chain,” said Gilbert Ghostine, CEO Firmenich. “We are very proud to be the first in our industry to sign this covenant, underlining our commitment to advancing sustainability across our supply chain, while enhancing the livelihoods of the local farmers that produce citrus fruits.”

    Anouk ter Laak, CEO SVZ, comments: “We’re very pleased to sign the covenant, as sustainability is an integral part of our activities, we believe it is absolutely key to the long-term strategy of our business. Our commitment to source 100% sustainable, strongly underlines SVZ role in the supply chain to ensure transparency for our customers and to support our growers in practicing sustainable agriculture.”

    Next steps for the coalition are to put annual process monitoring in place, start pre-competitive projects in the field and to develop an activity plan for the first year. The partners are also seeking to inspire more liked-minded companies to join the covenant and work together towards a more sustainable supply chain. The covenant is open to all players in the supply chain.

    Source: IDH The Sustainable Trade Initiative

    By Caroline Whibley News
  • 16 Nov
    Energy Gels increase in popularity over sports drinks and energy bars

    Energy Gels increase in popularity over sports drinks and energy bars

    MARKET REPORT. Energy gels are packets of gel substance that are used to provide continuous delivery of energy during periods of peak performance. These gels provide carbohydrates in combination with fruit juice or herbal extracts, electrolytes, fructose and taurine. Energy gels are preferred over other energy products as gels provide carbohydrate that is quickly absorbed into the bloodstream and is easier to digest.

    The global energy gel products market is expected to witness a CAGR of 7.2%, and is projected to reach USD 767.0 million by 2023 according to research published in the Global Energy Gel Products Market Outlook, Trend and Opportunity Analysis, Competitive Insights, Actionable Segmentation & Forecast 2023 report. Factors propelling the growth of the energy gel products market are the rise in demand for instant energy products and growing awareness regarding the benefits of energy gels over other energy products.

    Source: Globe Newswire

    By Caroline Whibley News
1 2